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It's nice to let writers upload word processing documents, but if the site goes on just treat them like attachments, making prospective readers download them, it sharply cuts back on the number of people who are actually going to bother. (I've been in the web development business for a very long time, and there's a lot of research about this.) The advantage that FN and SoFurry have now is that they display our stories immediately to users.

Having said that, there are ways to improve over what we have now. A WordPress-like ability to switch between a WYSIWYG editor and a plain text/Markdown editor, for instance, could go a long way, especially if the WYSIWYG editor is reasonably good at preserving basic formatting like bold and italics when rich text is copied-and-pasted from word processors. And, it might be possible to upload some file types, convert them and then present them to the user for proofing/editing. (Pandoc can transparently convert DOCX and ODT, although it can't do RTF or the original DOC. I'd imagine it could be pretty easily handed off to a system process by Node.)